Manchester United Said to Sign Mister Potato Deal Before IPO

A statue of George Best, Denis Law and Bobby Charlton stands outside Old Trafford, home of Manchester United in Manchester. Photographer: Mike Hewitt/Getty Images

Aug. 22 (Bloomberg) -- Manchester United Ltd., the record
19-time English soccer champion, will sign a sponsorship deal
with Malaysian snacks maker Mamee Double Decker Bhd. next month,
said three people familiar with the matter.

The tie-up is with Mister Potato, a brand of potato crisps
and chips made by the Kuala Lumpur-listed company, said the
people who did not want to be identified before the signing and
official announcement in the middle of September. They declined
to provide details of the agreement. The brand’s market share in
Malaysia for potato products was as much as 48 percent last year,
according to the company’s website.

The plan comes as the Premier League team plans an initial
public offering in Singapore to raise $1 billion later this year,
three people familiar with the IPO plans said last week. A stake
of up to 30 percent may be sold, said one of the people.
Manchester United’s existing sponsors in Asia include India’s
Bharti Airtel Ltd., South Korea’s Kumho Tire Co., Thai beer
brand Singha and Hong Kong telecommunications provider PCCW Ltd.

Manchester United wants to cut financing costs and raise
money that could be used for players. It spends about 45 million
pounds ($74 million) a year to service a 500 million-pound bond.

The club, which Forbes magazine estimates is now worth $1.8
billion and Deloitte LLP says is the richest in revenue behind
Real Madrid and Barcelona in a list published in February 2011,
says it has about 190 million of its 330 million fans in Asia.

Manchester United declined to comment on the deal, as did
Paul Anand, an outside spokesman for Mamee Double Decker.

Expanding Footprint

“The multitude of local events we run with global and local
partners, and a prospective forthcoming tour of Asia in 2012,
necessitate expanding our footprint both with people and office
space,” Manchester United said in a statement earlier this month.
“This is consistent with the huge appeal of Manchester United in
the region, borne out of nearly 40 years of visiting.”

The deal with Mamee Double Decker will allow the use of
Manchester United’s Red Devil logo and images of star players
such as Wayne Rooney and Javier Hernandez, according to one of
the people familiar with the plan.

Under the U.S.-based Glazer family, the team’s owners, and
former JPMorgan Chase & Co. banker Edward Woodward, the team’s
chief of staff, Manchester United changed the way it deals with
sponsors in 2008 to capitalize on its global appeal.

The club has signed regional and sector-specific deals as
well as preserving the rights of global partners, allowing
commercial revenue, excluding shirt sales, to grow 10-fold to 40
million pounds since June 2008.

Asian Sponsors

Aon Corp., the team’s principal sponsor, agreed to pay 80
million pounds for the right to have its name emblazoned on the
team’s shirt for four years. The contract with Mammee Double
Decker will be the latest to be signed with an Asian company.

In August, the club signed PCCW Ltd. as its official
telecommunications and broadcast partner for Hong Kong.

The team has won four Premier League titles and appeared in
three Champions League finals, winning in 2008, since it was
bought by the Glazers in 2005. A decline in performances on the
field won’t affect its income from sponsors because none of the
contracts carry success clauses.

Overall commercial revenue is close to passing 100 million
pounds for the first time, which would bring it in line with the
team’s broadcast and match day income. The club has 70 employees
in a London-based commercial sales office and plans to relocate
to a larger property. It’s also seeking to open an office in
Asia. The team is seeking global partners in the energy,
information technology and mobile-phone industries.

The club’s revenue puts it in third place globally for
sales behind Spain’s Real Madrid and Barcelona. Last month,
Premier League rival Arsenal announced record sales of 379.9
million pounds on property sales. Yet, the sales for the team’s
soccer activities declined by 1.3 percent to 222.9 million
pounds.